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Our phones have become an integral part of our daily lives that we simply cannot do without.
With the iPhone X, Apples’ latest model, you can do anything from checking email, keep in touch with a loved one who is miles away as well as dish out commands to a built-in AI assistant (Siri) – stuff that basically every other smartphone does.
Holding $1,000 in your hands, as opposed to having it saved in your credit card could easily get you the latest iPhone model.
However, that money can easily go into more valuable and useful ventures or items that could change your life either in the short in the long-term.
Here are some of the wisest alternative ways to utilize $1,000 with zero regrets way after the ‘iPhone X’ craze becomes a thing of the past:
1. Start an Emergency Fund
A huge number of individuals, mostly in their mid-twenties, haven’t even considered their retirement options. Those who have an emergency fund have $500 or less stashed away (which is not bad for a start).
Preparing for the future is one thing most people fail to do. $1,000 is more than enough to ensure your financial security.
Emergency savings funds can help you to live knowing you have a brighter future that’s void of any unforeseen expenses and circumstances.
If you have a specific set of fixed expenses every month, there are bound to be inevitable emergencies that come about.
Each month you have to cater for your automobile gas, food, home utility bills, car insurances, car payments, life insurance, health insurance, and mortgage.
If, for instance, you’re living week to week and you don’t have a cent in your savings account or bank account.
In case of a sudden unfortunate incident such as a job loss, you’ll have a very catastrophic predicament on your hands.
Instances like these are why you need to weigh your financial options and give priority to what matters most.
When you hit retirement age, you definitely want to have a lifetime’s worth of savings to live life like you’re supposed to. Social security isn’t such a reliable option when looking to enjoy your retirement.
If you deposit those precious dollars you have in your possession to your emergency fund, you would have taken a positive step in safeguarding you and your family’s health and safety. We live in uncertain times where our paying for each of our expenses is essentially an uphill task.
Rather than burdening yourself with loans may dent your credit score, set some money aside. Wouldn’t it be nice to have an emergency fund that you can rely on if you urgently need some financial assistance?
2. Clear Your Credit Card Debt or Any Other Debt Thereof
It’s a huge possibility that, while you save for a brand new iPhone X, you have $8,377 worth of credit card debt and your student loan debt is well over $34,000.
It won’t cost you anything (other than an irrelevant iPhone X) to divert that money into cutting down a huge chunk of this debt. Better yet, you could even decide to clear any debt you have with this kind of money.
If you’re not comfortable doing it all at once, start by establishing a clear budget. Make use of personal finance tools such as Mint.com or even design your own Excel spreadsheet and fill out all your expenses and monthly income.
Scrutinize those categories and determine where you can easily cut costs. Avoiding to scale your spending will result in digging yourself into an even deeper hole.
Your most expensive debt should be the first to be written off. Develop a clear arrangement of your entire interest rates from most to least, then first work on the credit card with the highest interest rate.
By doing so, you can increase your average payment on the credit card that has the most overwhelming annual percentage rate.
As for the rest of the cards, you can continue making a minimum payment on each one of them. Even better, see how you can use the iPhone money to pay more than what’s expected of you.
This simple strategy is referred to as ‘making a dent in your debt’. Once you decide to pay the minimum alone, you’re basically prolonging your debt payoff strategy.
Even though you will easily clear your debt, you’ll have to be mindful of how you use your credit cards. That’s a sure way to have your finances under control.
3. Start an investment and Assess its Growth
While splurging $1,000 on a trip to Disneyland for a week or treating yourself to Starbucks coffee for a whole year is an alternative, try something a little more fulfilling like investing.
Never take for granted the power of compound interest; the $1,000 you invest today is more likely to grow exponentially to over $2,225 in ten years, with a return of 8 percent. Setting an amount like that away for every month for 25 years will gradually make you a self-made millionaire.
Contributing $1,000 to your investment may prove to be a rather difficult task for you, as it is for other Americans at the moment.
If you have an extra grand at the moment, you can easily use it as a stepping-stone to kick-start your savings for retirement by handing in a 401(k) that’s employer-sponsored.
You could alternatively place it in a traditional or Roth IRA – both of which offer hefty tax advantages from their unique retirement accounts.
Are you among the staggering sixty-nine percent of Americans whose savings contain less than $1,000? You may definitely want to put your plans for an iPhone aside for now.
Do the wise thing and invest it. Over time, it will grow and give you financial assistance at a certain point in your life.
Financial experts recommend that you should build up approximately three to six months’ worth of your living expenses toward a rainy day fund.
Others reason that it’s better to have somewhere between eight months to twelve months worth of money in the bank.
There’s no problem if you choose to follow one, leave out the other or just do both. Either way, that bonus $1,000 can assist you to get started at a faster pace.
4. Start Saving for Retirement
No matter how much you take care of it, that iPhone X won’t last you until retirement.
That’s why it would be wise to use that $1,000 that you would have wasted away on such a fragile device for a retirement savings account. Do this by investing in a budget-friendly ETF that keeps track of the market.
If you’re thirty years old right now, earn a six percent annual return and you plan on investing that iPhone money until you hit 65, that money can significantly rise to $7,686.09 if you don’t buy that iPhone now.
Putting into consideration that the basic median retirement savings for families between 56 and 61 years stand at $17,000.
That, in itself, can greatly benefit you in more ways than you ever imagined. If you begin saving, say $1,000 every year instead of upgrading your phone to the most recent model, you can easily end up with a staggering $121,000 upon reaching retirement age.
That should be enough to convince you to either put on hold or forget that costly upgrade cycle. You’re never too old or too young to start saving for retirement.
By giving your savings more than enough time to grow, what you’ll need is a relatively low and consistent investment to end up with a hefty balance.
Saving for an attainable financial retirement goal of a million dollars isn’t as hard as you may think. Just by starting with less than $4,500 every year over a career that spans 45 years, you can easily have way past a million bucks.
If you’re planning on investing in a retirement plan which provides a matching contribution from your boss, then your basic yearly investment would be as little as $2,200.
5. Pay off Your Mortgage
You may have a mortgage if you have shelter above your head. It has probably not struck your mind to put that extra $1,000 toward settling your mortgage sooner.
For instance, if you owe $160,000 on a mortgage of 30 years with an interest of 4.13%, you can save interest of $1,898 on average.
This is after you’ve saved an additional interest of $1,361after making some additional payments for around 10 years.
As a matter of fact, your savings stand to go way the past interest of $1,000 just as long as you’ve paid at least half of your average home loan. There are several ways in which you can accelerate the loan – repayment process.
If you have more than $1,000 on hand than your initial loan amount or you plan on owning your own home as early as now, there are principal payments you can make every month. This will guarantee a quicker mortgage payment process.
Prior to making minor or significant changes in your payment schedule, you need to know if there are prepayment penalties you need to take care of first.
Typically, penalties such as these are applicable once you’ve paid off your full mortgage balance in the shortest time possible, which is approximately 3-5 years.
Not all mortgages you take will incur penalties; if there’s one linked to your loan, you probably agreed to it the moment you closed on your home.
The following are a few ways you can add that iPhone money into your savings to pay off your mortgage early enough:
- Every month, add something on top to your loan principal.
- Make payments on a biweekly basis.
- Prioritize your mortgage by going about your budget carefully.
- Use that $100 to round up your monthly payments.
- Make extra payments to your principal occasionally.
- Use an aggressive, conservative strategy to produce a higher return from your investment.
- Pay without calculating special or additional mortgage payments.
6. Do Some Major Home Renovations
Contrary to most homeowner’s beliefs, you don’t really need to spend your year’s worth of savings to revamp your home.
Even with $1,000, you can still do a splendid job on your home’s decor to give it a more functional and aesthetic feel.
By undertaking the renovation process, you’ll not only be making it more pleasing to the eye but increasing its value as well.
Doing simple things like replacing your front door can incur significant investment returns in case you plan on selling your house in future. If anything, most of the renovations will be for your own enjoyment.
What You Can Do to Renovate Your Home for Less Than $1,000
Replace The Toilet
Your bathroom’s looks can be impacted significantly by replacing old, outdated or cracked toilets. Purchase a new one with more style for a hundred dollars or take the eco-friendly route and purchase a used toilet – though you’ll need to replace the seat.
You can find a wide variety of decently-priced goods at repurposed construction material.
Do Some Tiling
Even the darkest bathrooms can be given a fresh look just by installing a tile floor. Tiles are not only to clean, but they’re also allergen and microbe resistant.
They also wear perfectly in high-traffic places thus making them the best material for your bathroom.
If you’re looking to buy one, stop at any flooring liquidator. If your bathroom is not spacious, you have the option of purchasing popular designer alternatives. The rest of your money can be put aside for hiring a professional installer.
Replace Or Redesign Your Entry Door
The curb appeal of any home is mostly determined by how good or how ugly the front door looks. As you give your home a well-deserved face-lift, don’t forget to add some color or give a more refreshing design to your front door.
Safety and security should be your number one priority if you choose to replace your door. It should have durable hardware while simultaneously being able to appeal to potential buyers’ practical side.
Buy a New Programmable Thermostat
Lower your home’s temperature by a degree or two by replacing your faulty thermostat with a programmable one. According to experts, heating your home typically accounts for 40% or more of the total energy usage.
Potential buyers will applaud your move as you’re assisting them with the long-term savings. Programmable thermostats are more preferable as they offer a customizable temperature profile.
These are just a few of the many ways you can put that $1,000 to relevant use when it comes to domestic renovation.
Don’t hesitate to look up more ways to give your home a new look without breaking your budget.
7. Donate it Anonymously to Someone in Need
The only time people can ever donate stuff or cash to charity is when the holidays are just around the corner or when there are natural calamities.
We all have our struggles, but there are those with even bigger problems that we simply can’t relate to.
You may think that you’re not better placed to be of assistance to someone else, but in the real sense, you are.
If you’re willing to part with $1,000 to purchase a smartphone, what more reason do you need to prove that you can be there for someone else?
While you can take care of yourself, you could also be of assistance to someone else. Of course, you won’t sort out every needy cause.
That’s why you should decide how to partition your iPhone cash in such a way that benefits you and benefits others as well. How exactly do you choose who to help and who to leave out?
World-renowned author Peter Singer offers his take on this matter in his book, ‘The Most Good You Can Do’.
Though you may not share his individual perspective of how to handle the whole charity-giving operation, he offers some candid points that are bound to get you thinking a lot.
He explores something known as ‘effective altruism’, which is a philosophy that gives you more reason to be of assistance to more people other than yourself.
To do this, give as much as you feel you can donate to genuine charity organizations that work hand-in-hand with the government to ensure the survival of the less fortunate.
From hurricane relief funds to hunger charities, there are plenty of charities you can donate to. Rather than buy a brand new iPhone X and regret two days later, take part in a noble cause and feel good about yourself for the rest of your life.
8. Open a College Savings Fund
College students can attest to the fact that college fees can rid you of all your money to the last cent. At the moment, the cost of taking a four-year degree course spirals up by the day.
It even outpaces inflation at some point. That basically means that having a ‘mattress account’ doesn’t come close to clearing even a quarter of your college fees.
If you’ve not come up with a way of paying for your college fees, start by depositing the $1,000 you’ve set aside for buying a new iPhone X.
Most people may not know this, but $1,000 is a good amount to start a college savings fund. To increase the fund, you can top it up with a certain percentage of your holiday and kids’ birthday money as time goes by. The more you deposit, the more your fund increases at a slow but sure level.
If you have kids, don’t wait until they’re older to start saving for their college fees. Statistics put together by the College Board revealed that the average cost of a year in college between 2013 to 2014 was $42,419 for universities or colleges. For public in-state schools, students had to part with $18,943.
With numbers such as these, it’s easy to be discouraged just by looking at them. To ensure your kids’ educational security, saving early enough is key. Always take advantage of any legitimate opportunities that may come your way.
Find out all you can regarding the bank itself, what you need to open an account, and who can apply.
9. Boost Your Immune System
If you have $1,000, the last thing on your mind would probably be to hit the gym or buy a few healthy treats. Most people included ‘get healthy’ in their New Year’s resolutions only to rule it off halfway through the first month of the year.
Above everything else, your health should always come first. To boost your immune system, you’ll have to sacrifice all the fancy features of the iPhone X for weekly grocery shopping and annual gym memberships.
$1,000 can go a long way in ensuring a lifetime free from obesity, diseases and most importantly, premature death.
Treatments such as massages, chiropractic care and acupuncture services are beneficial, but not everyone can afford it.
Reshuffle your schedule and make it a point to meet with a doctor or fitness trainer every once or twice a week.
Buying a new iPhone X is not a bad thing if it’s well within your means. The problem comes when you can’t afford it and you decide to save and buy a phone that will cost you an arm and a leg.
Do the wise thing and invest greatly in your health. Be it fitness or diet, put your overall health first and other things will follow.
Do You Still Want to Buy the iPhone X?
Apple recently unveiled its newest model – the iPhone that was retailing at a whopping $1,000. The surprising thing about it is that prior to its release, there was a significant number of pre-sale orders.
It’s amazing how people can splurge a year’s worth of income on a device that they’re not fully aware if it’s worth the price.
Tech giants like Apple are making billions, if not trillions, out of users who are quick to make uninformed decisions that may cost them a lot later on.
Most people under 30 feel the need to own the most recent models of their favorite brands. If you’ve not yet purchased the iPhone x, but you’re working as hard as you possibly can to raise $1,000, you still have time to rethink your resolve.